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What is Open Market Shared Equity?
Open Market Shared Equity, or OMSE, is a Scottish Government shared equity scheme within the wider Low-cost Initiative for First Time Buyers (LIFT). It may support eligible buyers on low to moderate incomes who cannot afford a suitable home on the open market without assistance.
When applications are open, buyers usually fund the largest share they can afford through savings and a capital repayment mortgage. This is normally between 60% and 90% of the lower of the property’s valuation or purchase price. The Scottish Government holds the remaining share under a shared equity agreement.
Buying through OMSE gives you complete title to the property, with your name on the title deeds. The Scottish Government’s financial stake is protected through the shared equity agreement and related security over the property.
Link administers OMSE across Scotland and assesses applications. The Mortgage Broker can provide mortgage advice and help you prepare, but Link makes the scheme eligibility decision.
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accessible by The Mortgage Broker ScotlandThe scheme is currently closed. When it reopens, OMSE is intended for first-time buyers and qualifying priority access groups who cannot afford a suitable home without support. Priority access groups include social renters, disabled people with a housing need, members of the armed forces, veterans who left the armed forces within the previous two years, eligible bereaved partners of service personnel, and people aged 60 or over with a housing need. Applicants must usually be unable to afford a suitable home without OMSE support and must not own another property at the point of purchase. Most applicants need a mortgage. People aged over 60 with a housing need may be able to apply without one, subject to the scheme rules.Who may be eligible for OMSE?
What to prepare for an OMSE application
When OMSE reopens, most applicants will need a Mortgage Promise or Mortgage Agreement in Principle. Link also asks for supporting evidence for everyone who will live in the property, even where they are not named on the mortgage.
This can include recent bank and savings statements, payslips or self-employed income evidence, benefit information where relevant, and proof of your current accommodation. The exact documents required should be checked against the current Link guidance when applications reopen.
A Mortgage Agreement in Principle may involve a credit search, depending on the lender. We will explain the likely search type before you proceed.
When applications reopen, Link will assess whether you meet the scheme criteria and whether you could afford a suitable home without OMSE support. The Mortgage Broker can help you understand the mortgage and affordability information that may be relevant, but cannot confirm OMSE eligibility. The property you choose must be within the scheme’s current maximum threshold for the area and apartment size. The amount you can contribute from savings and a mortgage will also affect the proposed shared equity split. Because thresholds, budgets and application requirements can change, use the current official OMSE guidance before you make a financial commitment.How OMSE eligibility and affordability are assessed
Your responsibilities as an OMSE homeowner
An OMSE buyer has complete title to the home and the same day-to-day responsibilities as any other homeowner. This includes mortgage payments, buildings and contents insurance, repairs and maintenance, council tax, utilities, fittings and furniture.
Your OMSE home is expected to be your only residence and subletting is not generally permitted. Check your Shared Equity Agreement, and take advice from Link or your solicitor, before making changes that may require consent.
Before you buy, review the Home Report carefully so you understand the condition of the property and any repairs you may need to fund.
When you sell an OMSE property, the Scottish Government is normally entitled to its agreed percentage of the sale proceeds. The percentage will be set out in your Shared Equity Agreement. Before accepting an offer, speak to your solicitor and contact Link or the relevant administering agent. They can explain the process, confirm the Scottish Government’s stake and outline any information needed to complete the sale. If you have increased your own equity share since buying the property, the Scottish Government’s share may be lower than it was at purchase. Where a golden share applies, a Scottish Government stake may remain.What happens when you sell an OMSE property?
Can you buy more equity in your OMSE home?
In many cases, you can increase your share of an OMSE property later if your financial position changes. This is sometimes called increasing your equity share or staircasing.
Under current guidance, any increase must normally be at least 5% in a year. You will usually need a valuation and may be responsible for valuation, legal and administration costs.
Most owners may be able to increase their share to 100%, but this depends on the terms of their Shared Equity Agreement. A golden share can limit the maximum share you can buy.
What is a golden share?
A golden share is a condition in some Shared Equity Agreements that keeps a 10% Scottish Government stake in the property. It is generally used in areas where affordable homes are in shorter supply.
Where a golden share applies, you may be able to increase your share only to 90%, rather than 100%. Check your Shared Equity Agreement and speak to your solicitor or the administering agent before arranging an equity purchase.
Meet The Scottish Mortgage Team
Our Scotland-based mortgage advisers can help you understand the mortgage side of OMSE, prepare your borrowing position and discuss suitable next steps. Link administers the scheme and makes OMSE eligibility decisions.
Rob McCraw
Mortgage Advisor
Luka Brudar
Mortgage and Protection Adviser
From Setback to Success: First-Time Buyers Secure £237K Mortgage
Initial Enquiry
| New Lending | Property Value | Balance | Loan to Value | Term | Interest Rate | Payment Type | Product Type | Payment |
| Mortgage | £250,000 | £237,500 | 95.00% | 25 | 5.18% | 2 Year Fixed | £1,411.98 |
The Challenge
- Previous adverse credit, including defaulted accounts.
- 5% deposit.
The Solution
After thorough research and discussions with lenders, we were able to secure a mortgage solution that met all of the client’s objectives. Despite the limited number of lenders allowing a First Time Buyer mortgage with adverse credit and 5% despoit. We successfully placed with a lender that makes their lending decision on the overall credit score. Since one of the applicants had a good credit score, this helped balance out the score and pass criteria with the lender.
The Result
How Did This Help?
This solution not only provided the customers with the property they wanted to purchase, it also restored their confidence, by understanding the context of the credit issues and leveraging a lender with flexible criteria, we turned a potentially declined application into a successful outcome. Demonstrating the value of compassionate, knowledgeable brokerage.
Advisor: Harrison AndrewsSpeak to a Scotland Mortgage Advisor Today
OMSE applications are currently closed, but an early conversation can help you understand your mortgage position and prepare for a future reopening. We will explain what can be assessed now, what depends on lender criteria and what Link would need to decide if you later apply.
Speak to a mortgage adviser to:
- Understand the current OMSE position and how the scheme may apply if it reopens
- Review your likely mortgage affordability and lending options
- Discuss whether a Mortgage Agreement in Principle is useful at this stage
- Identify the documents that may help you prepare
- Explore other appropriate Scottish home-buying routes where relevant